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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)
Genovese Drug Stores, Inc.
(Name of Issuer)
Class A Common Stock, par value $1.00 per share
(Title of Class of Securities)
372442 20 2
(CUSIP Number)
Gene L. Wexler, Esq.
Genovese Drug Stores, Inc.
80 Marcus Drive
Melville, New York 11747
(516) 845-8433
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 30, 1997
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
[X].
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on following pages)
(Page 1 of 10 Pages)
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CUSIP NO. 372442 20 2 13D PAGE 2 OF 10 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Leonard Genovese
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP * (a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS *
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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7 SOLE VOTING POWER
NUMBER OF 0
SHARES ------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 4,145,139
REPORTING ------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
4,145,139
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,145,139
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES * [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
See response to Item 5.
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14 TYPE OF REPORTING PERSON *
IN
- --------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT
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CUSIP NO. 372442 20 2 13D PAGE 3 OF 10 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Frances Genovese Wangberg
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP * (a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS *
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES ------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 4,145,139
REPORTING ------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
4,145,139
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,145,139
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES * [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
See response to Item 5.
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON *
IN
- --------------------------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT
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This Amendment No. 3 is being filed to report the acquisition of
beneficial ownership of the Class A Common Stock, par value $1.00 per share (the
"Class A Common Stock"), of Genovese Drug Stores, Inc., a Delaware corporation
(the "Company"), as a result of the entering into by Leonard Genovese and
Frances Genovese Wangberg (collectively, the "Reporting Persons") of a
Stockholders Agreement dated as of June 30, 1997 (the "Stockholders Agreement"),
a copy of which is filed herewith as Exhibit 1. This Amendment No. 3 also serves
as an initial Schedule 13D for Frances Genovese Wangberg, who formerly filed on
Schedule 13G with respect to the Class A Common Stock of the Company.
This report on Schedule 13D is hereby amended and restated in its
entirety as follows:
ITEM 1. SECURITY AND ISSUER.
The securities to which this statement relates are the shares of Class
A Common Stock of the Company. The principal offices of the Company are located
at 80 Marcus Drive, Melville, New York 11747.
ITEM 2. IDENTITY AND BACKGROUND
(a) Names:
Leonard Genovese
Frances Genovese Wangberg
(b) Business Addresses:
Genovese Drug Stores, Inc.
80 Marcus Drive
Melville, New York 11747
(c) Employment and Name, Principal Business and Business Address
of Employer:
Mr. Genovese is the Chairman of the Board, President and Chief
Executive Officer of the Company. Mrs. Wangberg is a Director
of the Company. The principal business of the Company is the
operation of retail drug stores. The business address of the
Company is 80 Marcus Drive, Melville, New York 11747.
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(d) Criminal convictions:
During the last five years, neither of the Reporting Persons
has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) Civil Proceedings Regarding Securities Violations:
During the last five years, neither of the Reporting Persons
has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result
of such proceeding subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
(f) Citizenship:
United States of America
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
All 4,145,139 shares of Class A Common Stock beneficially owned by the
Reporting Persons were acquired other than by purchase, as follows: (a) the
Reporting Persons are co-trustees of the Trust under the Will of the late Joseph
W. Genovese, Jr., pursuant to which they each acquired beneficial ownership of
1,732,339 shares; (b) Mr. Genovese is trustee of the Trust under the Will of the
late Joseph Genovese, Sr., pursuant to which he acquired beneficial ownership of
626,302 shares; (c) Mr. Genovese is the beneficial owner of a total of 1,574,481
shares (including options), which he acquired through (i) inheritance from
Joseph Genovese, Sr., his father; (ii) stock dividends declared from time to
time by the Company; (iii) bonus shares awarded from time to time under various
employee stock plans of the Company; and (iv) grants (and exercises) of stock
options under various stock option plans of the Company; and (d) Mrs. Wangberg
is the beneficial owner of a total of 212,017 shares, which she acquired through
(i) inheritance from Joseph W. Genovese, Jr., her husband; (ii) stock dividends
declared from time to time by the Company; and (iii) grants (and exercises) of
stock options by the Company to non-employee directors.
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ITEM 4. PURPOSE OF TRANSACTION
On June 30, 1997, the Reporting Persons entered into the Stockholders
Agreement to impose certain restrictions on and conditions to the transfer and
voting of the Class A Common Stock and the Class B Common Stock, par value $1.00
per share (the "Class B Common Stock" and, together with the Class A Common
Stock, the "Common Stock"), of the Company beneficially owned by them. The Class
B Common Stock is not registered as a class of equity securities under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), but may be
converted or exchanged for shares of Class A Common Stock at any time.
The Stockholders Agreement governs all shares of Common Stock and all
securities convertible into or exchangeable for Common Stock beneficially owned
by the Reporting Persons or their Permitted Transferees (as defined in the
Stockholders Agreement) as of the date of the Stockholders Agreement or at any
time thereafter, subject to certain limited exceptions.
The Stockholders Agreement provides that, subject to certain limited
exceptions, neither the Reporting Persons nor their Permitted Transferees may,
without the prior written consent of both Reporting Persons, directly or
indirectly, whether voluntary or involuntary, sell, distribute, transfer,
assign, pledge, hypothecate or otherwise dispose of (including, without
limitation, by tendering such shares into a tender offer) or encumber
(including, without limitation, by subjecting such shares to any proxy or voting
agreement, trust or other arrangement except as set forth herein) any Common
Stock subject to the Stockholders Agreement or any interest therein. All
Permitted Transferees will be required to become a party to the Stockholders
Agreement.
The Stockholders Agreement also provides that, without the prior
written consent of the Reporting Persons, the Reporting Persons and their
Permitted Transferees will not convert or exchange any shares of Class B Common
Stock into or for shares of Class A Common Stock except as may be required in
connection with certain permitted transfers.
The Stockholders Agreement further provides that on all matters that
are put to a vote (or action by written consent) of the stockholders of the
Company, including, without limitation, the election of directors, a merger,
consolidation, sale, acquisition or other business combination involving the
Company and amendments to the Company's certificate of incorporation or by-laws,
each of the Reporting Persons and their Permitted Transferees will vote (or act
by written consent with respect to) its Common Stock as directed in writing by
both of the Reporting
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Persons; provided, however, that if the Reporting Persons cannot agree as to how
such Common Stock shall be voted, such Common Stock will be voted in accordance
with the recommendation of the Company's Board of Directors.
The foregoing description of the Stockholders Agreement is qualified in
its entirety by reference to the Stockholders Agreement, a copy of which is
filed herewith as Exhibit 1.
Leonard Genovese expects from time to time to acquire shares of Class A
Common Stock pursuant to the Company's stock option and other employee stock
plans. Frances Genovese Wangberg expects from time to time to acquire shares of
Class A Common Stock pursuant to stock options granted to non-employee directors
of the Company. Both reporting persons expect from time to time to acquire
shares of Class A Common Stock as stock dividends by the Company in accordance
with past practice, if and to the extent declared by the Board of Directors of
the Company. In addition, the Reporting Persons may from time to time dispose of
shares of Class A Common Stock or Class B Common Stock pursuant to gifts and
other transfers of such shares, subject to the provisions of the Stockholders
Agreement. In addition, subject to the provisions of the Stockholders Agreement,
the Reporting Persons may from time to time purchase or sell shares of Class A
Common Stock or Class B Common Stock depending on the prevailing market prices
of the Class A Common Stock, personal financial and tax considerations and other
factors.
Except as described above, the Reporting Persons do not have any plans
or proposals which would relate to or result in:
(a) the acquisition by any person of additional securities of the
Company, or the disposition of securities of the Company;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of
its subsidiaries;
(c) a sale or transfer of a material amount of assets of the
Company or of any of its subsidiaries;
(d) any change in the present board of directors or management of
the Company, including any plans or proposals to change the
number or term of directors or to fill any existing vacancies
on the board;
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(e) any material change in the present capitalization or dividend
policy of the Company;
(f) any other material change in the Company's business or
corporate structure;
(g) changes in the Company's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Company by any person;
(h) causing a class of securities of the Company to be delisted
from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of
a registered national securities association;
(i) a class of equity securities of the Company becoming eligible
for termination of registration pursuant to Section 12(g)(4)
of the Exchange Act;
or
(j) any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) - (b) At the date hereof, the Reporting Persons do not have the
sole power to vote or to direct the vote or to dispose or to direct the
disposition of any shares of Class A Common Stock. At the date hereof, the
Reporting Persons have the shared power to vote or to direct the vote and to
dispose or to direct the disposition of 4,145,139 shares of Class A Common
Stock.
The Reporting Persons are parties to the Stockholders Agreement
described in Item 4 in both their individual capacities, in their capacities as
trustees of the Trust under the Will of the late Joseph W. Genovese, Jr. and, in
the case of Leonard Genovese, in his capacity as trustee of the Trust under the
Will of the late Joseph Genovese, Sr. The 4,145,139 shares of Class A Common
Stock beneficially owned by the Reporting Persons pursuant to the Stockholders
Agreement include (a) 92,520 shares of Class A Common Stock, options to purchase
226,310 shares of Class A Common Stock, which are exercisable at any time, and
1,255,651 shares of Class B Common Stock owned by Mr. Genovese, (b) 5,392 shares
of Class A Common Stock, options to purchase 19,336 shares of Class A Common
Stock and 187,289 shares of Class B Common Stock owned by Mrs. Wangberg, (c)
1,732,339 shares of Class B Common Stock held
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by the Trust under the Will of the late Joseph W. Genovese, Jr. and (d) 626,302
shares of Class B Common Stock held by the Trust under the Will of Joseph
Genovese, Sr.
The 4,145,139 shares of Common Stock beneficially owned by the
Reporting Persons represents 57.4% of the voting power represented by the Common
Stock as of June 24, 1997. In addition, such shares represent 32.7% of the total
shares of Class A Common Stock outstanding as of June 24, 1997, assuming the
conversion or exchange of all outstanding shares of Class B Common Stock, and
the exercise of the options to purchase Class A Common Stock beneficially owned
by the Reporting Persons.
(c) On June 16, 1997, Mr. Genovese was awarded options to acquire
150,000 shares of Class A Common Stock pursuant to the Company's 1984 Employee
Stock Option and Stock Appreciation Rights Plan. The options are exercisable at
prices of (i) $19.38 as to 75,000 shares, (ii) $25.00 as to 37,500 shares and
(iii) $30.00 as to 37,500 shares. The options vest on the date that is five
years from the date of grant, and are subject to accelerated vesting under
certain conditions, including a change in control of the Company.
On June 23, 1997, Mr. Genovese gave 1,000 shares of Class A Common
Stock to a relative.
(d) Mr. Genovese is the trustee of the Trust under the Will of the late
Joseph Genovese, Sr., with shared voting and dispositive power with the
Reporting Person (pursuant to the Stockholders Agreement) with respect to the
626,302 shares of Class B Common Stock owned by such trust. Viola Genovese is
the beneficiary of such trust, and as such, is entitled to dividends from and
proceeds from the sale of the securities owned by such trust in accordance with
the terms of such trust and applicable law.
Except as stated herein, to the best of the Reporting Persons'
knowledge, no other person has the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the securities
described in response to Item 5(a).
(e) Not applicable.
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
Please see the description of the Stockholders Agreement in Item 4.
With the exception of the Stockholders Agreement, there are no contracts,
arrangements, understandings or relationships (legal or otherwise) among or
between the Reporting Persons and any other persons with respect to any
securities of the Company.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS
Exhibit Description
------- -----------
1 Stockholders Agreement dated as of June 30, 1997, by and among
certain stockholders of Genovese Drug Stores, Inc., including
Leonard Genovese and Frances Genovese Wangberg.
SIGNATURE
After reasonable inquiry and to the best of his or her knowledge and
belief, each of the undersigned certifies that the information set forth in this
Schedule 13D is true, complete and accurate.
/s/ LEONARD GENOVESE
-------------------------------
Leonard Genovese
/s/ FRANCES GENOVESE WANGBERG
-------------------------------
Frances Genovese Wangberg
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EXHIBIT INDEX
Exhibit Description
------- -----------
1 Stockholders Agreement dated as of June 30, 1997, by and among
certain stockholders of Genovese Drug Stores, Inc., including
Leonard Genovese and Frances Genovese Wangberg.
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STOCKHOLDERS AGREEMENT, dated as of June 30, 1997 (this
"Agreement"), by and among the stockholders of Genovese Drug
Stores, Inc. (the "Company") who are signatories hereto and
are listed in Schedule I annexed hereto (individually, a
"Stockholder" and collectively, the "Stockholders").
WHEREAS each Stockholder owns beneficially or of record the number
of fully paid and non-assessable shares of Class A Common Stock, par value $1.00
per share, of the Company ("Class A Stock") and Class B Common Stock, par value
$1.00 per share, of the Company ("Class B Stock" and, together with the Class A
Stock, "Common Stock") set forth opposite such Stockholder's name on Schedule I
attached hereto;
WHEREAS the Stockholders desire to enter into this Agreement to
impose certain restrictions on and conditions precedent to the transfer of the
Common Stock and voting of the Common Stock held by the Stockholders;
NOW, THEREFORE, in consideration of the premises, obligations and
agreements contained herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto hereby
agree as follows:
ARTICLE I
Effective Date and Scope
SECTION 1.01. Date of Effectiveness. This Agreement shall become
effective as of its date (the "Effective Date").
SECTION 1.02. Shares and Parties Governed. All shares of Common
Stock and all securities convertible into or exchangeable for Common Stock now
or hereafter beneficially owned by a Stockholder or any Permitted Transferee (as
defined in Section 3.01), other than shares of Common Stock held under the
Company's 401(k) employee benefit plan or held in trust under any other employee
benefit plan of the Company, in any such case so long as they are held under
such plan, shall be deemed "Stockholder Shares" and shall be subject to this
Agreement.
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SECTION 1.03. Certain Definitions. As used in this Agreement, the
following terms have the indicated meanings, unless the context otherwise
requires:
An "affiliate" of a person means, with respect to such person, any
other person directly or indirectly controlling (or sharing control of) or
controlled by or under direct or indirect common control with such person.
For the purposes of the foregoing, "control" (including, with correlative
meaning, "controlled by" and "under common control with") as used with
respect to any person means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
such person, whether through the ownership of voting securities, by
contract or otherwise.
An "associate" of a person means, with respect to such person, (i)
any corporation, partnership, limited liability company, unincorporated
association or other entity of which such person is a director, officer,
partner or member or is, directly or indirectly, the owner of 20% or more
of any class of voting stock, (ii) any trust or other estate in which such
person has at least a 20% beneficial interest or as to which such person
serves as trustee, executor, administrator or in a similar fiduciary
capacity and (iii) any relative or spouse of such person, or any relative
of such spouse, who has the same residence as such person.
The terms "beneficially owned" or "beneficial owner" have the
meanings set forth in Rule 13d-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
The term "person" means any individual, group (as such term is used
in Rule 13d-5 under the Exchange Act), corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, government, agency or political subdivision
thereof or other legal entity.
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ARTICLE II
Transfer and Conversion Restrictions
SECTION 2.01. General Restriction. Except as set forth in Article
III, without the prior written consent of both Leonard A. Genovese and Frances
Genovese Wangberg (the "Principal Stockholders"), no Stockholder or Permitted
Transferee shall, directly or indirectly, whether voluntary or involuntary,
sell, distribute, transfer, assign, pledge, hypothecate or otherwise dispose of
(including, without limitation, by tendering such shares into a tender offer) or
encumber (including, without limitation, by subjecting such shares to any proxy
or voting agreement, trust or other arrangement except as set forth herein) any
Stockholder Shares or any interest therein (all of which acts shall be deemed
included in the term "transfer" as used in this Agreement).
SECTION 2.02. Conversion or Exchange Restriction. Each Stockholder
or Permitted Transferee agrees that so long as this Agreement is in effect,
without the prior written consent of both of the Principal Stockholders, it will
not convert or exchange any shares of Class B Stock into or for shares of Class
A Stock except as required by Section 3.03.
ARTICLE III
Certain Permitted Transfers
SECTION 3.01. Permitted Transfers. The Stockholders acknowledge and
agree that any of the following transfers of Stockholder Shares shall be
permitted without the prior written consent of the Principal Stockholders (and
each of the persons to whom a transfer is made pursuant to any of clause (a),
(b), (c) or (d) (other than, in the case of clause (d), a transfer pursuant to
clause (i) or (ii) of the proviso thereto) of this Section 3.01 is herein called
a "Permitted Transferee"):
(a) a transfer upon or consequent to the death of a Stockholder or
Permitted Transferee to the executors, administrators, testamentary
trustees, legatees or beneficiaries of a deceased Stockholder or Permitted
Transferee; provided, however, that (i) the recipient of any such transfer
shall be a descendant of Joseph Genovese, Sr., or a spouse of such a
descendant and (ii) the transferee agrees to be bound by this Agreement as
if named a Stockholder herein and executes
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a counterpart hereof (including a counterpart Schedule I) and such further
documents as may be necessary, in the opinion of both of the Principal
Stockholders, to make it a party hereto;
(b) a transfer made to a descendant of Joseph Genovese, Sr., or a
spouse of such a descendant, or to a trust, all of the beneficiaries and
trustees of which, or to a corporation, partnership or limited liability
company, all of the stockholders or partners or members of which, include
only the Stockholder, a descendant of Joseph Genovese, Sr., or a spouse of
such a descendant, or a trust for the sole benefit of one or more of the
foregoing; provided, however, that the transferee agrees to be bound by
this Agreement as if named a Stockholders herein and executes a
counterpart hereof (including a counterpart Schedule I) and such further
documents as may be necessary, in the opinion of both of the Principal
Stockholders, to make it a party hereto;
(c) a transfer by a Permitted Transferee of any Stockholder to such
Stockholder or to any other Permitted Transferee of such Stockholder;
provided, however, that the transferee agrees to be bound by this
Agreement as if named a Stockholder herein and executes a counterpart
hereof (including a counterpart Schedule I) and such further documents as
may be necessary, in the opinion of both of the Principal Stockholders, to
make it a party hereto;
(d) a transfer made as a gift to a charitable organization;
provided, however, that the transferee agrees to be bound by this
Agreement as if named a Stockholder herein and executes a counterpart
hereof (including a counterpart Schedule I) and such further documents as
may be necessary, in the opinion of both of the Principal Stockholders, to
make it a party hereto, unless (i) such transfer to any one organization
or group of related organizations in any calendar year does not exceed
5,000 shares (adjusted for any stock splits, dividends or combinations
subsequent to the Effective Date made to all holders of Common Stock) of
Class A Stock (after giving effect to Section 3.03) or (ii) the entering
into of this Agreement by the transferee would eliminate or materially
reduce the tax benefits to the transferor associated with such gift;
(e) a transfer of Class B Stock by the Trust established for the
benefit of Viola Genovese pursuant
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to paragraph FIFTH of the Last Will and Testament of Joseph Genovese, Sr.
upon the death of Viola Genovese, pursuant to clause (A) of subparagraph
III of such paragraph FIFTH;
(f) a transfer made to (i) a financial institution in connection
with a pledge or foreclosure of a pledge made to secure a bona fide
personal loan or (ii) the Company in connection with a pledge or
foreclosure of a pledge made to secure indebtedness or any other
obligation to the Company; provided, that any pledge entered into after
the Effective Date shall provide that as a condition to any foreclosure on
any shares of Class B Stock, such shares shall be converted into or
exchanged for shares of Class A Stock in accordance with Section 3.03; and
(g) a transfer made as a gift to any person of not in excess of
2,000 shares (adjusted for any stock splits, dividends or combinations
subsequent to the Effective Date made to all holders of Common Stock) of
Class A Stock (after giving effect to Section 3.03) in any calendar year.
SECTION 3.02. Public Distribution. Notwithstanding anything to the
contrary set forth in this Agreement, any Stockholder may sell some or all of
such Stockholder's Stockholder Shares as part of a public offering registered
under the Securities Act of 1933 (the "Securities Act") or a sale in the public
market in a transaction exempt from registration under the Securities Act that
would not result in any person, together with its affiliates and associates,
owning more than 5% of the total outstanding Class A Stock taking into account
all shares subject to outstanding options or securities convertible into or
exchangeable for the Class A Stock (including the Class B Stock) beneficially
owned by such person but without giving effect to any such shares or securities
not beneficially owned by such person.
SECTION 3.03. Conversion to Class A Shares. Any shares of Class B
Stock to be transferred pursuant to Section 3.01(d), foreclosures under Section
3.01(f)(i) (it being understood that this Section 3.03 shall not apply to
foreclosures on pledges entered into prior to the Effective Date unless the
pledge agreement or similar documentation would not prohibit such conversion or
exchange), Section 3.01(g) or Section 3.02 shall be converted into or exchanged
for shares of Class A Stock prior to such transfer.
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SECTION 3.04. Notice of Transfer. Each Stockholder agrees that it
will provide written notice to each Principal Stockholder at least 10 days in
advance of any transfer proposed to be made by such Stockholder to a Permitted
Transferee pursuant to this Article III.
ARTICLE IV
Voting Agreement
SECTION 4.01. Until the termination of this Agreement in accordance
with its terms, each Stockholder and each of such Stockholder's Permitted
Transferees agrees that on all matters that are put to a vote (or action by
written consent) of the stockholders of the Company, including, without
limitation, the election of directors, a merger, consolidation, sale,
acquisition or other business combination involving the Company and amendments
to the Company's certificate of incorporation or by-laws, it will vote (or act
by written consent with respect to) its Stockholder Shares as directed in
writing by both of the Principal Stockholders; provided, however, that if the
Principal Stockholders cannot agree as to how the Stockholder Shares shall be
voted, the Stockholder Shares shall be voted in accordance with the
recommendation of the Company's Board of Directors.
SECTION 4.02. Irrevocable Proxy. In order to effectuate Section 4.01
and in addition to and not in lieu of Section 4.01, each Stockholder hereby
irrevocably for the term of this Agreement appoints each of Leonard A. Genovese
and Frances Genovese Wangberg as such Stockholder's proxy, each with full power
to act alone and with full power of substitution, to represent and to vote (or
to act by written consent with respect to) in accordance with Section 4.01 all
of the Stockholder Shares beneficially owned by such Stockholder and entitled to
be voted by such Stockholder.
ARTICLE V
Stock Certificate Legend
A copy of this Agreement shall be filed with the Secretary of the
Company and kept with the records of the Company. Each certificate representing
Stockholder Shares owned by the Stockholders and their Permitted Transferees
shall bear upon its face the following legend:
THE TRANSFER OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE
IS RESTRICTED UNDER THE TERMS OF A
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STOCKHOLDERS AGREEMENT DATED AS OF JUNE 30, 1997, COPIES OF WHICH ARE ON
FILE AT THE OFFICE OF THE COMPANY. IN ADDITION, THE SHARES OF STOCK
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF
A VOTING AGREEMENT CONTAINED IN ARTICLE IV OF THE STOCKHOLDERS AGREEMENT
REFERRED TO ABOVE.
Such legend may be placed on the certificate by the Stockholder or by the
Company (or its agent) upon the Stockholder's request. Upon any transfer of
Stockholder Shares by a Stockholder or a Permitted Transferee to a Permitted
Transferee in which one or more new certificates in respect of such shares are
to be issued, the Stockholder or the Permitted Transferee shall request that the
Company cause such new certificate or certificates to bear the above legend.
Upon any transfer of Stockholder Shares pursuant to clause (i) or (ii) of the
proviso to Section 3.01(d) or pursuant to Section 3.01(e), Section 3.01(f),
Section 3.01(g) or Section 3.02, any Stockholder may exchange the legended
certificates representing the shares to be so transferred for certificates not
bearing the above legend.
ARTICLE VI
Miscellaneous Provisions
SECTION 6.01. Binding Effect; No Assignment. The provisions of this
Agreement shall be binding upon the parties hereto and their respective heirs,
legal representatives, successors and, to the extent permitted hereby, assigns.
This Agreement and the rights and obligations of the parties hereunder may not
be assigned in whole or in part.
SECTION 6.02. Recapitalization, Exchanges, etc., Affecting the
Company's Capital Stock. The provisions of this Agreement shall apply to the
full extent set forth herein with respect to the Stockholder Shares and to any
and all shares of capital stock of the Company or any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) which
may be issued to the Stockholders and their Permitted Transferees in respect of,
in exchange for or in substitution of, the Stockholder Shares, by reason of any
stock dividend, stock split, stock issuance, reverse stock split, combination,
recapitalization, reclassification, merger, consolidation or otherwise.
SECTION 6.03. Amendments; Waivers. This Agreement may be amended,
and compliance with its provisions
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may be waived, only by a written instrument signed by both of the Principal
Stockholders.
SECTION 6.04. Notices. All notices and other communications provided
for herein shall be dated and in writing and shall be deemed to have been duly
given when delivered, if delivered personally or sent by registered or certified
mail, return receipt requested, postage prepaid and when received if delivered
otherwise, to the party to whom it is delivered, at the following address: in
care of Gene L. Wexler, Esq., Genovese Drug Stores, Inc., 80 Marcus Drive,
Melville, NY 11747, or at such other address as the parties hereto shall have
specified by notice in writing to the other parties.
SECTION 6.05. Applicable Law. The laws of the State of Delaware
shall govern the interpretation, validity and performance of the terms of this
Agreement, regardless of the law that might be applied under principles of
conflicts of law.
SECTION 6.06. Integration. This Agreement and the documents referred
to herein or delivered pursuant hereto which form a part hereof contain the
entire understanding of the parties with respect to the voting and transfer of
Stockholder Shares.
SECTION 6.07. Descriptive Headings. The headings in this Agreement
are for convenience of reference only and shall not limit or otherwise affect
the meaning of terms contained herein.
SECTION 6.08. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument, and it shall not be necessary in
making proof of this Agreement to produce or account for more than one such
counterpart.
SECTION 6.09. Additional Stockholders. From time to time other
persons that are the record or beneficial owners of Common Stock may become a
party to this Agreement, subject to the written consent of, and upon such terms
and conditions as shall be agreed by, the Principal Stockholders. Upon execution
and delivery, after the date hereof, of a counterpart signature page to this
Agreement setting forth such person's name and a counterpart Schedule I setting
forth the number and class of shares of Common Stock beneficially owned by such
person and the address at which such person shall receive notices if other than
as set forth in Section 6.04, such person shall become
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a party hereto and shall be bound hereby with the same force and effect as if
originally named as a Stockholder hereunder. The rights and obligations of each
Stockholder hereunder shall remain in full force and effect notwithstanding the
addition of any new Stockholder as a party to this Agreement.
SECTION 6.10. Termination. This Agreement shall terminate on the
earlier of (a) the date that is ten years from the Effective Date and (b) the
death or mental incapacity of either of the Principal Stockholders, unless
earlier terminated by written agreement of the Principal Stockholders or
extended by amendment of this Agreement in accordance with Section 6.03.
SECTION 6.11. Specific Performance. (a) The parties hereto
acknowledge that the benefits to them under this Agreement are unique, that they
are willing to enter into this Agreement only upon performance by each other of
all of their obligations hereunder and that monetary damage would not afford
adequate remedy for failure to perform any such obligations hereunder.
Accordingly, the parties hereby consent to specific performance of their
obligations hereunder and waive any requirement for securing or posting of any
bond in connection with the obtaining of any injunctive or other equitable
relief to enforce their rights hereunder.
(b) The parties agree that, in the event any controversy or claim
between any of the parties arising out of or relating to this Agreement shall
result in litigation, the appropriate court in the State of Delaware shall have
jurisdiction to hear and decide such matter, and each party hereby submits to
the jurisdiction of any such court in which any such suit or proceeding is so
instituted. The parties further acknowledge and agree that such court is a
convenient forum for litigation of any controversy or claim arising out or of
relating to this Agreement.
IN WITNESS WHEREOF, the parties have entered into this Agreement as
of the date first above written.
/s/ Leonard A. Genovese
-----------------------------------------
Name: Leonard A. Genovese, in his
capacity as Trustee of the Trust
established for the benefit of Viola
Genovese pursuant to paragraph FIFTH
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of the Last Will and Testament of
Joseph Genovese, Sr.; in his capacity
as Co-Trustee of the Trust established
for the benefit of Francis Genovese
Wangberg pursuant to paragraph FOURTH
of the Last Will and Testament of
Joseph Genovese, Jr.; and individually
/s/ Frances Genovese Wangberg
-----------------------------------------
Name: Frances Genovese Wangberg, in
her capacity as Co-Trustee of the
Trust established for the benefit of
Frances Genovese Wangberg pursuant to
paragraph FIFTH of the Last Will and
Testament of Joseph Genovese, Jr.; and
individually
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SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF
CLASS A
NUMBER OF SHARES NUMBER OF
CLASS A SUBJECT TO CLASS B
Name SHARES OPTIONS SHARES
---- ------ ------- ------
<S> <C> <C> <C>
Leonard A. Genovese 92,520 226,310 1,255,651
Frances Genovese Wangberg 5,392 19,336 187,289
Trust under the Will of the late 1,732,339
Joseph W. Genovese, Jr.
Trustees: Leonard A. Genovese
Frances Genovese
Wangberg
Trust under the Will of the late 626,302
Joseph Genovese, Sr.
Trustee: Leonard A. Genovese
</TABLE>
